Understanding Islamic Finance - Doha Academy of Tertiary Studies

112 Understanding Islamic Finance5.5.4 Avoiding Qimār and Maisir (Games of Chance)Qimār includes every form of gain or money, the acquisition of which depends purely onluck and chance. Maisir means getting something too easily or getting a profit withoutworking for it. All contracts involving Qimār and Maisir are prohibited. Present-day lotteriesand prize schemes based purely on luck come under this prohibition. Dicing and wageringare rightly held to be within the definition of gambling and Maisir. Therefore, Islamic bankscannot launch any such schemes or products. 205.5.5 Prohibition of Two Mutually Contingent ContractsTwo mutually contingent and inconsistent contracts have been prohibited by the holy Prophet(pbuh). This refers to1. The sale of two articles in such a way that one who intends to purchase an article isobliged to purchase the other also at any given price.2. The sale of a single article for two prices when one of the prices is not finally stipulatedat the time of the execution of the sale.3. Contingent sale.4. Combining sale and lending in one contract.In order to avoid this prohibition, jurists consider it preferable that a contract of sale mustrelate to only one transaction, and different contracts should not be mixed in such a way thatthe reward and liability of contracting parties involved in a transaction are not fully defined.Therefore, rather than signing a single contract to cover more than one transaction, partiesshould enter into separate transactions under separate contracts.Islamic banks may come across a number of transactions in which there could be interdependentagreements or stipulations that have to be avoided. The combination of somecontracts is permissible subject to certain conditions:• Bai‘ (sale) and Ijarah (leasing) are two contracts of totally different impacts; whileownership and risk are transferred to the buyer in Bai‘, neither ownership nor risk transferfrom the lessor to the lessee. It is necessary, therefore, that lease and sale are kept asseparate agreements. In Islamic banks’ Ijarah Muntahia-bi-Tamleek (lease culminating intransfer of ownership to the lessee), the relationship between the parties throughout thelease period remains that of the lessor and lessee and the bank remains liable for the risksand expenses relating to ownership. Transferring ownership risk to the lessee during thelease period would render the transaction void. However, one of the parties can undertakea unilateral promise to sell, buy or gift the asset at the termination of the lease period.This will not be binding on the other party.• Shirkah and Ijarah can be combined, meaning that a partner can give his part of ownershipin an asset on lease to any co-partners. Jurists are unanimous about the permissibilityof leasing one’s undivided share in a property to any other partner. 21 However, sale ofownership units to the client in Diminishing Musharakah will have to be kept totallyseparate, requiring “offer and acceptance” for each unit.20 Already discussed in detail in Chapter 3. Also see Saleh, 1986.21 Usmani, 2000a, p. 86.